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September 2019: European hoteliers struggle to start the new school year

Most countries are struggling this month, with a few exceptions. Destinations are slowing down in this time darkened by several bankruptcies in the tourism industry (Thomas Cook, Aigle Azur, XL Airways, Adria Airways...).

The evolution of the customer base is indeed stagnant, for an occupancy rate of 81.2%; the average daily rate (€110.20 excluding VAT) slightly compensates for this stagnation producing a RevPAR that evolves at the same speed: +1.9% for both indicators.

The heart of Europe shines brightly in this back-to-school month. Belgium and Luxembourg had more in common than just the institutions of the European Union, since both countries have both been undeniably successful.

Flemish and French-speaking Belgium broke a triple record, namely the best increase in occupancy rate, by +1.5 points (OR 81.5%), the best average daily rate, i.e. +13.2% (ADR €118.70 excl-VAT), naturally leading to a double-digit revenue per available room, i.e. +15.4% (€96.70 excl-VAT) - the fastest increase in RevPAR. Brussels, which concentrates a large part of the Belgian hotel supply, usually performs best in September each year. Indeed, leisure tourists and MICE activity are combined to raise the temperature of Brussels hotels up +21.4% of RevPAR (€111.40 excl-VAT), thanks to an increase in the ADR (+17.7%) and the OR (+2.5 pts) which reaches 82.1% in this inter-season period.

Luxembourg, RevPAR's third best performing country, also performed well, for the same reasons as its European counterpart: business activity is very strong and traditionally focuses on the off-season following the summer period, due to the still mild temperatures it offers. The small state thus increased its RevPAR by +6.5% to €120.00 excluding VAT - Europe's first RevPAR in absolute terms. Its occupancy only changed significantly, from 80.3% to 80.8% (+0.5 pt), so that its increase is mainly due to an increase in the average daily rate (+5.8%) to €148.50 excluding VAT, which is also the best absolute result of the entire panel.

Despite the crisis in the Spanish hotel sector caused by the bankruptcy of Thomas Cook on 23 September, the country managed to close the podium by climbing to third place. With a slight increase in occupancy (+1.1 pt) and a slight increase in rates (+7.6%), the Iberian kingdom increased its RevPAR by +9.0%, the second-best growth on the continent, to reach €92.20 excluding VAT. Spain's good health is due to the fact that the market is mainly driven by urban tourism. The metropolitan areas have been particularly successful, notably Madrid and Barcelona, which have increased their occupancy rate by +2.1 pts (85.0%) and +3.5 pts (89.7%) respectively, and even by +17.8% (€107.40 excl-VAT) and +27.0% (€138.30 excl-VAT) in terms of RevPAR.

Italy follows in Spain's footsteps with the fourth best growth in RevPAR, +4.5% (€111.70 excluding VAT). The European Republic combines an increase in ADR (+2.5%) and OR (+1.6 pt) to support this growth. However, it is not the fruit of a very tourist destination such as Venice, since the latter, which has implemented an entry tax to limit and compensate for its tourist attendance, has lost -0.8 pt of occupancy, for an OR of 87.7% - which remains the second best result in absolute terms behind Florence (90.4%), itself a city very popular with tourists, but which has not increased this month (+0.0%).

Four countries experienced a more or less similar situation, with stagnation or even a slight decline in their occupancy rates, while RevPAR grew by approximately 3-4%, driven by an ADR increase. In order of growth in revenue per room: Portugal (+4.4%), Poland (+4.4%), the United Kingdom (+3.3%) and France (+3.1%).

The British realm has raised its ADR (+3.8%) to compensate for the fluctuation of the pound sterling, a decline accompanied by a loss of tourists (-0.4 pt OR) in the face of the new Prime Minister's inability to be reassuring about the exit from the EU, initially scheduled for 31 October 2019, making the Brexit "no deal" scenario more and more likely.

Portugal managed to recover after a month of August in decline (-1.3 pt) to stabilize at a very good occupancy rate - the best in the whole panel - namely 90.0% (+0.7). This increase comes along with a rise in ADR (+3.6% - €103.60 excl-VAT), proof that the destination is regaining confidence and popularity, boding well for a good winter season.

Poland only compensates its losses (-0.1 pt) by increasing its ADR (+4.5%) to post a positive RevPAR balance at the end of the month, which goes from €56.00 to €58.50 excluding VAT. Krakow (-0.1 pt), Wroclaw (-3.1 pts) and the idyllic city of Poznan (-3.6 pts) are losing popularity. Only its capital, Warsaw (+0.7 pt) and its port city of Gdansk (+4.3 pts) manage to maintain their OR level.

Hungary is the exception this month: it is the destination that loses the most market share (-2.7 pts) and yet manages to obtain a positive balance of its RevPAR (+1.6%), supported by the ADR which increases by +4.8% (to reach €94.10 excl-VAT).

Finally, six states are on a negative slope this month in terms of RevPAR, mainly located in Central and Northern Europe (except for one Mediterranean country): the Netherlands (-0.2%), Greece (-0.3%), the Czech Republic (-0.6%), Latvia (-2.2%), Austria (-3.9%) and last, but not least, Germany (-5.8%).

The German Federal Republic had the most difficult start of the school year. Almost all major German cities have lost market share. Only three of them maintained their RevPAR upwards: Dresden (+0.4%), Leipzig (+3.0%), and Düsseldorf (+5.2%). Nationally, occupancy (-1.0 pt) and rates fell (-4.6%), with an average of €107.30 excluding VAT, the eighth highest average daily rate in absolute terms.

As for Austria, its capital Vienna (-1.1 pt) and Mozart's birthplace (-0.6 pt) failed to attract tourists in September. It remains to be seen if the MICE season, which began in September, succeeded in improving the performance of the destination of Vienna that is ranked second in Europe in terms of the number of meetings of international associations, which is estimated at 404 in 2018, behind Brussels (763 meetings).


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